This summer brought a surge of natural disasters across the U.S. One in three Americans experienced a natural disaster this summer, according to The Washington Post. From wildfire smoke blanketing the Western skies throughout most of the summer to Hurricane Ida devastating the Gulf Coast to destructive flooding in the Northeast, no area of the country was entirely safe. And, according to the UN Climate Change report, the world will face extreme droughts, severe heat waves and catastrophic hurricanes for decades to come. 

When disasters strike, insurance companies can quickly become overwhelmed with calls and claims. This summer, the frequency and severity of natural disasters demonstrated the need for a distributed, scalable response team of knowledgeable and empathetic listeners. 

A Scalable Response to Hurricane Ida 

Hurricane Ida made a devastating impression in late August, reopening wounds left from Hurricane Katrina 16 years earlier. As the storm made landfall, more than one million people had no electricity, and the loss was insurmountable. 

In the days following the storm, residents began taking the toll of the damage and started calling their insurance companies. In this time of distress, they needed quick resolution and an empathetic ear on the other end of the line. 

At Liveops, a virtual contact center that provides customer care, we experienced the critical importance of having enough agents available in a time of great need. Our 27,000 agents, who can take calls for claims and assist insurance companies and their customers when disasters strike, responded to 14,000 claims just on Aug. 30 and 31. 89% of calls were answered in 20 seconds or less, providing customers a helping hand in the wake of a disaster. 

Providing Empathy and Peace of Mind

Living through and recuperating from a natural disaster can be stressful and traumatic. Without basic needs like power or running water, survivors of natural disasters are often entirely reliant on the help and generosity of others — including the agent processing a claim after a hurricane. 

Those recovering from a natural disaster don't need to experience long wait times, being placed on hold or even not connecting with an agent at your insurance company. Having them be able to make one phone call and reach an agent who demonstrates empathy and proficiency is invaluable. 

With the likelihood of natural disasters and the need for a 24/7 response team increasing, insurance companies will also need to consider what may happen if a natural disaster hits their headquarters or affects their workforce. If workers cannot come to work or offices become unfit for conducting business, a distributed, scalable workforce helps keep operations running smoothly. 

See also: 3 Keys to Leading a Team in a Crisis

The Unpredictability of Our World

Natural disasters aren’t the only circumstance in which a scalable response team is essential to processing an influx of claims. The last 18 months have demonstrated just how unpredictable the world can be and how the ability to adapt quickly is critical. When COVID-19 hit, for instance, the roads became eerily quiet, but people have started traveling again -- and car insurance claims volumes are skyrocketing. At Liveops, our call volume for our insurance clients has increased 134% year-over-year.

Insurance companies should thoroughly evaluate their response teams to assess their ability to respond to customer calls or even their own workforces’ ability to work when, not just if,  a disaster strikes.

2020 and 2021 taught us that the world is unpredictable. 2022 likely has surprises in store for us, too.

Keeping track of employees, an important function for corporate HR departments under normal circumstances, has been even more challenging during the COVID-19 pandemic. Eight in 10 employers say the pandemic taught them the importance of absence management, according to a recent Guardian study.  

Further, state laws around regulated leave can change, and federal regulations are highly complex. Complying with related state and federal leave programs is one of the greatest absence management-related challenges your customers’ HR teams will ever face.  

Managing absences, especially using spreadsheets, is hard in the best of times, but has been doubly challenging during the pandemic, with some employees working remotely and others returning to the office. It’s no wonder HR teams are overburdened.

The growing complexity has led employers to look to insurers for more integrated, turnkey solutions. It has also served as a catalyst for insurers to develop automated absence management systems. Employers want to be in compliance, have up-to-date customer data, reduce the cost and time for HR departments and see real-time employee absence patterns and trends. For their part, employees want better tools for monitoring their attendance and tracking vacation time and related benefits. 

The new generation of automated absence management systems can help employers stay in compliance and track employee absences by connecting to a greater digital ecosystem of HR management systems. These systems also have the advantage of easily integrating with federal and state regulations or third-party vendors that monitor and update regulations as they occur. By bringing all these systems together, insurers can make reporting and data analysis easier for HR teams.

But not all absence management systems are created equal. Ease-of-use should be a given, but the following features are important to ask about:  

Employees providing input

Automation lets your customers’ employees schedule their own absences or log sick days. Claims that don’t meet eligibility requirements can be auto-rejected without the involvement of your customers’ HR teams.

Knowing what to expect

An absence management system should provide additional information and avenues to next-stage claims management. For example, your customers should be able to create a rule that a certain type of absence indicates whether physical therapy is likely in store for that employee, or if an absence related to an accident can help trigger a related claim. 

The importance of centralized data to spot patterns

When all employee data is in one place, absence patterns are easy to identify. Maybe your customer has an employee who is absent every second Friday, or an entire team is requesting vacation time the same week. Absence management software can help uncover patterns with tracking and reporting.

See also: Designing a New Employee Experience

Integrating changing regulations

Absence management systems should have the capability to integrate with third-party vendors that manage changing regulations to remain fully compliant with all federal and state regulations related to absence, including FMLA, disability and ADA. They should also have the ability to integrate with internal compliance systems. This feature, which is driven by the need for technology based on application programming interfaces (APIs), is a game-changer for organizations that run across multiple states.

A link to HR/health systems 

When absence management software links to HR management systems and health management software, it’s easy to monitor all the functions together in a single, seamless ecosystem, which is the ultimate goal.

Managerial efficiency

Finally, absence management software should allow managers to access all leave requests in a central place, ensuring appropriate coverage and deadline management.

Giving your customers the ability to add data and analytics and communicate across digital platforms is critical. Absence management software can do just that – collecting, managing, analyzing and reporting on important data and giving HR teams the information they need to maintain compliance, increase efficiency and reduce costs simultaneously.

The vision of a metaverse laid out by Mark Zuckerberg last week is bonkers. Nutso on steroids. It won't be realized in my lifetime, yours or his, even if some of the wildest claims about longevity come true and we all live to be 150.

The vision is essentially a fever dream for gamers who'd love to immerse themselves in their online worlds and not have to worry about the messy details of physical existence, so it doesn't directly bear on the insurance industry. But there are still elements of it that could be dangerous to insurers if taken seriously.

The main problem is the underlying claim that the internet is about to morph into something very new -- and that we all need to start preparing. It won't, and we don't.

The story -- and there's always a story to these flawed technovisions that appear from time to time -- is that the version of the internet that appeared in public view in the 1990s was essentially a broadcast medium. Companies posted news, advertised their wares, etc., and people consumed that information in front of their computers. In the 2000s, Internet 2.0 arrived. It went beyond broadcast and became interactive. We didn't just consume what companies put in front of us. We interacted with companies and their products and with each other -- pioneering companies, Facebook among them, actually turned those interactions into their "product." So, here we are, a decade-plus later. That must mean the internet is ready for another leap forward, right? I mean, what has it done for us lately?

While the capabilities of the internet will continue to expand exponentially, the power will come from the explosion of information it will have at its disposal (including from billions of new sensors and hundreds of millions of additional cameras), from the increased speed and ubiquity of wireless communication. from the continued surge in computing power generally described as Moore's Law and from the ever-growing reach of artificial intelligence (including AI that makes the AI better--a mind-blowing proposition).

Those gains, while wildly powerful, won't lead to a multiverse for two main reasons: the technology and human nature.

The technology is actually the lesser of the problems, even though virtual reality -- the core piece -- is nowhere close to being ready as the entry point into a world where our primary existence is virtual. VR wasn't ready when it was the hot new thing 30 years ago. It wasn't ready when it staged a resurgence in the 2010s (when Facebook bought Oculus for $2 billion, in 2014). And it won't be ready any time soon. We humans have experienced the world in a certain way our whole lives, and we won't go into a virtual world until it gives us that same experience.

Even when the video gets far better than it is now -- people still often get motion sickness -- some things simply can't be simulated. You can only move so far while wearing VR goggles -- lest you trip or run into something in the real world. Some sensations, such as, say, bungee-jumping, can only be simulated so well even if your goggles tell you you're diving off a bridge. Textures and smells will be limited, too, as least for generations of the technology.

Other technologies that are just assumed in the Zuckerberg multiverse, including brain-computer connections, also have a long way to go before they could undergird a virtual world that more than hard-core gamers would want to live in. In the technology world, whenever anyone says that something is "only 10 years away," what they're really saying is that the claim might be science fiction -- and I don't know anyone who sees commercial possibilities for brain-computer connections even in a decade.

Human nature is the intractable problem. I think of a front-page story I wrote for the Wall Street Journal in the early 1990s about a prominent scientist who had written a book arguing that we'd soon be able to transfer our memories and consciousness into a robot -- at the small cost of the destruction of our physical brains and loss of our bodies. The article ran under this headline:

Good News: You

Can Live Forever;

Bad News: No Sex

In theory, Zuckerberg can argue that it's just as cool to dress up your avatar and send it to the top of the Eiffel Tower in the metaverse as it is to go there in person, but we all know that isn't true. Many things just can't be simulated.

Zuckerberg can do all the promotion he wants for the idea that a new version of the internet is in the offing and that it will become the core of our existence, but that's simply not the right way to think about what's coming. (In fact, as some have noted, the term "metaverse" comes from "Snow Crash," a 1992 sci-fi novel by Neal Stephenson, that is set in a dystopia.)

Even if we give Zuckerberg the benefit of the doubt and don't think his metaverse vision and the name change to Meta for Facebook are designed to distract from the company's many PR problems, he's falling into a trap that catches many smart technologists: He's lost touch with the real world.

As I detailed in this piece from early 2015 on a misconception by Google about the nature of the internet that isn't that far off from Zuckerberg's, many technologists have gotten so locked into their worlds that they lost track of key considerations in the one that really matters. But the fact that so many have been so wrong actually makes dealing with the metaverse easier -- we can see the pattern of error and avoid it.

There will, as always, be opportunities to participate in online worlds, including those that gamers spend so much time in now and that will continue to expand. The Biden campaign bought "yard signs" in a virtual world in 2020, and there will be opportunities for insurers to likewise at least advertise in virtual environments. But those virtual environments will be supplementary; they won't become the focus of our lives.

You already have enough on your plates as you try to, among many other things, figure out how to interact digitally with increasingly demanding customers. I assure you that you don't need to worry about shrinking your businesses to fit into Zuckerberg's metaverse, no matter how many awkward videos he produces that try to convince us otherwise.

Cheers,

Paul

As the adoption of artificial intelligence (AI) continues at pace across industries, there is increasing awareness of the risks it can pose. Recent high-profile examples have highlighted the risk of unjust bias regarding race and gender, such as those found in some law enforcement or recruitment algorithms. Other examples have highlighted the reputational risk from poorly communicated AI use cases, such as an online insurer’s recent claims of using facial emotion recognition to detect fraud. Perhaps most damagingly, AI models seem to have failed to meet expectations when it comes to mitigating one of humanity’s biggest challenges, the COVID-19 epidemic. 

Not surprisingly, regulators have become increasingly vocal. Earlier this year, the European Commission published a draft of its proposed AI law, which prohibits certain uses of AI and defines several other high-risk AI use cases. The Cyberspace Administration of China has just proposed far-reaching rules on the use of algorithmic recommendation engines, including a requirement to ensure gig workers are not mistreated by AI "work schedulers." In the U.S., federal banking regulators completed a comprehensive industry consultation exercise around AI risks in the sector earlier this year. The Securities and Exchange Commission has recently initiated a similar consultation on the use of behavioral algorithms and other digital engagement practices in retail investment (brokerage) platforms. And in April, the Federal Trade Commission warned companies to “hold yourself accountable – or be ready for the FTC to do it for you.”

Risk management professionals could claim that (a) these types of risks are highly technical and require specialist knowledge; and (b) AI/data science teams and their business stakeholders should have primary responsibility for managing them. They would be right on both counts. However, they should not underestimate their own enabling role in this space. 

Managing the risks from poor-quality AI is too important to leave purely to the specialists. Such risks must be viewed from a holistic, organization-wide perspective rather than a narrow technical lens. Risk management professionals should embrace this mandate -- as a way of supporting the digital transformation of their employers but also as a means of continuing their own professional growth. 

So how can they go about it? 

First, they must invest in learning more about AI, its potential and limitations and the ways in which the latter can be addressed. Not everyone has to become a data scientist, but the ability to ask the right questions will be critical. In particular, they should keep in mind that

• The workings of many AI models are far more opaque than traditional models. The most common type of AI algorithms (machine learning) creates models based on the data used to train them. As a result, the data scientist’s understanding of how the model actually arrives at its conclusions can be limited. This poses a challenge in convincing stakeholders – business line owners, risk and compliance teams, auditors, regulators and customers – about the algorithms' suitability for large-scale use. 
• AI models’ dependence on the training data can make them prone to particular weaknesses. Compared with traditional models, AI models are more likely to "overfit" or exaggerate historical trends. They may lose their predictive accuracy more easily in the face of changes in input data, such as those triggered by, for example, the pandemic. Finally, they can exacerbate existing biases present in the training data, such as biases regarding gender or race. 

Second, risk management professionals must connect the dots between these narrow data and algorithmic risks, and mainstream business risks. This requires a systematic and comprehensive mapping of AI risks to the broader risk landscape in the industry. For example, in banking, the most obvious risks related to large-scale AI use may already be covered as part of the specialist review of model risk and data risk. Model risk answers questions like, “Is the AI model reliable?” or “Is it working as intended?” Data risk answers questions like, “Is the data used to train the model accurate and representative of the target population?” or  “Is the AI model using or uncovering protected personal data elements inappropriately?” 

However, risk teams must go further and assess whether the use of AI accentuates one or more other existing risks, such as:

• The risk of treating a customer or staff member unfairly -- for example, by discriminating against certain groups when making lending or hiring decisions
• The risk of causing market instability or collusion due to malfunctioning algorithms
• The risk of “mis-selling” to a customer due to an algorithm that is not generating investment advice suited to the customer’s profile
• Business continuity risk due to lack of fallback plans in case of AI failure
• The risk of intellectual property theft or fraud due to adversarial attacks on the AI system

Third, and perhaps most importantly, risk management professionals must work with their business, data and technology colleagues to create mechanisms to manage such risks in a systematic manner. Left to themselves, individual data scientists and their business sponsors might well manage these risks in an ad hoc, case-by-case manner. Risk management professionals can help define risk appetites, standards and controls that enable such risks to be managed consistently and effectively.

See also: 3 Big Opportunities From AI and ML 

In this, they can call upon an increasing body of academic research and commercial tools to analyze AI models, explain the underlying drivers of the model outputs accurately and monitor and troubleshoot the model’s performance on a continuing basis. For example, such tools can allow organizations to: 

• Create transparency around the key drivers of the model’s predictions/ decisions (“Why did this radiology report not flag cancer risk?”)
• Assess any potential biases in model predictions and the root causes (“Do female applicants have a higher probability of getting short-listed for a particular job application than their male counterparts? If so, is that justified?”)
• Monitor model and data stability over time, trigger alerts when they breach pre-defined thresholds and identify the root causes of such instability (“Is our supply chain management model causing a higher number of parts shortages this month?”)
• Identify potential parts of the population for which the model is unreliable (“Are the model’s predictions for over-60 white collar workers based on too few data points?”)
• Identify potential changes in data quality that may affect the predictive accuracy of the model (“Can the bank’s lending model survive the massive changes in the economy due to COVID-19?”)

***

Increased transparency and control over AI are allowing organizations to become more sophisticated about the manner in which they use AI. The ability to manage these risks effectively can become a source of competitive advantage in the future.

In 2020, catastrophic weather, including severe wildfires, seven major hurricanes and a destructive derecho drove the proportion of catastrophe losses up 40% from 2019. These weather events were the largest drivers of losses for the home insurance industry in 39% of claims – the highest percentage in the last six years, according to the new 2021 LexisNexis Home Trends Report. 

Overall loss cost for all perils increased by 6% year-over-year, with some states more severely affected than others. Louisiana, for example, had the highest loss cost in the nation in 2020 due to a devastating hurricane season and overtook Colorado as the state most affected on average by wind peril in the last six years.

In the western part of the U.S., Colorado continues to rank highest in hail claims over states like Texas and Wyoming, while California accounted for the most loss cost, severity and frequency of fire and lightning claims, with 37% of all catastrophe claims nationwide and 75% of all catastrophe losses in 2020.

In addition to these extreme weather events, the report also tracked and analyzed the impact of COVID-19 on the U.S. home insurance market in 2020. Fewer houses were left unattended, with more people working from home, leading to a 53% decrease in liability and a 25% drop in theft loss costs. 

As people go back to the office and school, it’s likely these perils will return to their respective longer-term trends, making it important for carriers to consider how to support homeowners in lowering their future risks. 

To help carriers do that, the LexisNexis Home Trends Report provides by-peril home insurance data and location-based insights to help carriers make more informed risk assessments and underwriting decisions. Some of the additional key findings from the report by peril include: 

Wind

• Wind frequency, loss cost and severity all increased significantly in 2020  –  frequency increased by 42% this year and loss cost by 63%. 
• 2020 marked the largest wind loss cost recorded in the last six years.

Hail

• Loss cost and severity of hail claims declined in 2020, while frequency remained steady.
• However, catastrophe claims made up 62% of all hail claims this year, and the frequency of hail catastrophe claims increased a significant 9.9% year-over-year.
• In 2020, catastrophe claims made up 62% of all hail claims  –  a marked increase compared with 2019, when just 56% of hail claims were catastrophe claims. 

Fire and Lightning

• The 2020 wildfire season, the most active on record, led to increases beyond 2017 and 2018 levels in both loss cost and severity for insurers. The proportion of catastrophe losses also increased. 
• Fire and lightning loss cost also increased year-over-year, having peaked in September following a dramatic uptick in frequency in August 2020.

Non-Weather-Related Water

• While the six-year trend for water claims not related to weather continued to climb, 2020 did see a decrease of 8.7% in loss cost compared with 2019 – likely a result of people spending more time at home and perhaps increased use of smart water leak detectors.
• Claim frequency decreased by 7.3% while severity remained steady. 

See also: A Price Tag on Climate Change

For carriers looking to make location-based decisions, there are some additional state-specific key findings: 

• Colorado and Nebraska ranked highest in loss cost over the six-year period from 2015 to 2020, while West Virginia and Maine ranked lowest. 
• Likely as a result of Hurricanes Isaias, Marco and Laura hitting Louisiana and Texas, wind loss cost, frequency and severity all increased significantly in 2020. Loss cost rose 63%, and frequency increased 42% compared with 2019. 
• Colorado ranked highest in loss cost over the six-year period from 2015-2020. 
• California had the greatest non-weather-related water loss in 2020 at 100% higher than the national average loss cost.

With catastrophe claims driving losses and reinsurance costs higher, it's imperative for insurers to have the most recent peril-related trend data. Basing underwriting and pricing decisions on accurate and up-to-date data can help insurers meet loss-ratio objectives and growth targets, as well as support a better customer experience for consumers by helping homeowners avoid escalating costs.

These insights for both peril-related and location-based trends can help insurers assess and price risks more accurately, better assess their book of business and improve their understanding of how by-peril trends are changing over time. To download the full 2021 LexisNexis Home Trends Report, click here.

In February 2021, Out Front Ideas with Kimberly and Mark, hosted its most attended webinar to date, featuring expert panelists and data around COVID-19 claims. This data provided valuable insight into current trends, claims development and the real impact the pandemic has had on workers’ compensation. 

At their September 2021 virtual conference, Elevate, Kimberly and Mark invited the expert panelists back, and they provided updates to the most comprehensive and current COVID-19 claims data available. Panelists were:

• Max Koonce – chief claims officer, Sedgwick
• Tim Stanger – vice president – claims, Safety National
• Alex Swedlow – president, California Workers’ Compensation Institute (CWCI)

CWCI Claims’ Data Trends

Currently, COVID-19 represents about 13% of all workers’ compensation claims. Since the last Out Front Ideas presentation of CWCI’s data in February, California’s claims count of infections has grown by 31% and fatalities by 51%. California represents about 13% of the U.S. population but makes up about 11% of infections and 10% of deaths. 

In the early days of the pandemic, California’s working-age population was used to estimate the overall effect and cost on the system. This group’s infections and fatalities have increased, representing three out of four infections and about one in every four deaths. However, death claims continue to be more prominent in the older age groups. The over-50 age group represents 54% of non-COVID-19 death claims and 72% of COVID-19 death claims. There is also a higher proportion of females represented in COVID-19 fatalities due to the gender mix in the hardest-hit industry, healthcare.

Healthcare and public safety workers still make up the majority of COVID-19 claims, including death claims. Since February 2021, healthcare’s COVID-19 claims have dropped from 31% of the total to 23%. In that same time frame, first responders’ COVID-19 claims increased from 17% to 23%, and transportation’s COVID-19 claims doubled from 6% to 12%.

CWCI has also seen a drop in claims reporting in the 14-to-30-day period on COVID-19 claims. This could be an early indicator of the emergence of long-hauler claims or a new trend in litigated claims for COVID-19.

Denial rates are also increasing due to the pandemic having a broad societal impact. Nineteen out of every 20 infected working-age Californians did not report an industrial cause. Other factors affecting compensability include essential employee status, presumption laws, outbreaks, shelter-in-place requirements, investigation and reporting requirements. 

In a sample of 20 insurance carriers and 13 public and private self-insureds, representing 65% of all fourth-quarter denials, three core denial reasons were cited: medical verification, non-industrial reasons and reporting errors. Medical verifications dealt with employees who had a negative COVID-19 test or did not take a required polymerase chain reaction (PCR) test. Non-industrial reasons involved claims where the employee was not exposed at work, withdrew the claim or failed to cooperate. Reporting errors were due to a submitted claim not representing an employee, or a positive test was not associated with industrial causation. Since medical verification and reporting errors are unique to COVID-19, if these two categories are removed from the fourth quarter figures, the adjusted denial rate, only including non-industrial reasons, drops from 37% to 12%. The non-COVID-19 denial rate is also 12%.

Safety National Claims’ Data Trends

As a leading provider of excess workers’ compensation for self-insured entities, around 40% of Safety National’s accounts fall into two largely self-insured industries: public entities and healthcare networks. Because self-insureds are not required to report data to bureaus, much of these two industries are likely not included in bureau data. These industries also represented the frontline workers more likely to be exposed to COVID-19, making up the majority of claims. 

Roughly 40% of Safety National claims came through as report only, and the other 60% make up the actual claim activity. Even with the Delta variant on the rise, Safety National’s COVID-19 claims are trending down as of August. This inconsistency with CWCI data could be due to municipalities and healthcare workers missing from the data, vaccine availability and safety protocols. 

See also: Mental Health in Post-COVID Era

Between January and August 2021, there hasn’t been a considerable change in the percentage of each age group’s makeup of the COVID-19 claims share. The 26-35 age group make up the largest portion at 29%. Consistent with CWCI data, the older age groups, age 56-65 and older, make up the largest portion of the death claims. Unlike CWCI’s data, male deaths continue to exceed female deaths in Safety National claims. 

The healthcare sector still makes up the largest portion of death claims but saw a 3% decrease in reported claims since February. From January through July, COVID-19 death claims increased from 0.36% to 0.60%.

99% of Safety National’s claims are under $100,000. Of those that exceed $100,000, 89% range from $100,000 to $1 million, and 11% are over $1 million. Safety National has seen a number of COVID claims with incurred over $1 million including death claims and extensive hospitalizations. There have also been a few claims with incurred over $3 million due to extensive complications that led to organ transplants, brain injury and even quadriplegia.  

Sedgwick Claims’ Data Trends

Most of Sedgwick’s COVID-19 claims occurred within their top three represented industries: retail, public sector and healthcare. Healthcare represents 46% of the total claims, remaining unchanged since the end of 2020. The public sector claims volume has increased, representing about 20% of the claims volume. Retail accounts for roughly 16% of the claims volume. These three industries are responsible for 80% of the total COVID-19 claims.

Sedgwick has received roughly 110,000 workers’ compensation COVID-19 claims since the beginning of the pandemic. That figure was closer to 75,000 at the end of 2020, with the majority of additional claims added in January and February 2021. The top five states reporting COVID-19 claims are California, Texas, Michigan, Florida and Illinois, with California representing roughly 28% of the total claims. 

7.4% of Sedgwick’s COVID-19 claims remain open, and 90% are closed, with an average paid cost of less than $2,500. The remaining 1.4% are litigated, which mostly involves denied claims. The average incurred cost is 75% lower than non-COVID-19 claims, and the duration is also 33% shorter than non-COVID-19 claims. 

Sedgwick’s COVID-19 claims are evenly distributed across all age groups with no definitive breakouts. However, the severity of cases was higher among the older age groups. 

96% of the claims have very nominal costs, involving little to no missed work. The high-dollar claims associated with complex cases and fatalities represented only 4% of the total claims but accounted for 81% of the costs.

See also: On COVID Vaccine: Do the Math

Of the claims involving workforce absences, 85% involved leave of absence, 14% involved short-term disability and 1% involved Americans with Disabilities (ADA) regulations. Roughly 20% of short-term disability absences were COVID-19-related. Still, the average cost on those was 29% lower than non-COVID-19 cases and had an average duration that was 65% lower than non-COVID-19 cases. California also had more than twice the number of COVID-19 leave of absence cases than any other state during the prior 19 months. 5.4% of COVID-19 leave of absence cases were denied. 46% of all COVID-19 leave of absence cases were from the retail industry. 

Telehealth has made incredible progress throughout the pandemic, with about 20% of initial evaluations or doctor visits performed virtually at its height. Prior to the pandemic, telehealth represented less than 10% of those visits. Its impact has resulted in a shorter duration of short-term disability in both surgical and non-surgical claims. It also resulted in less time away from work, and cases involving physical therapy telehealth saw a shorter duration versus in-person visits.

While vaccine reaction claims have occurred, they represent a tiny percentage of COVID-19 claims: only 0.2% of total claims. 91% were medical only, involved only a few days of missed work and were closed within 45-60 days. 31% of those cases have been denied, as this is a state-specific issue.

You can view the archived recording of this session here.

A while back, I took one of those personality assessments, and the results were no surprise. I’m a “fixer.” Even when having casual conversations with friends, I want to fix their problem. That’s actually a helpful trait when you work in an insurance agency or brokerage. There’s never a shortage of things that need fixing, or at least, improvement.

I’m a firm believer that one must always be looking for ways to make systems and processes easier and more efficient. It’s a key to survival in our industry, which arguably was one of the later arrivals to the digital age. Now, with all the tools at our disposal, we have no excuse but to improve. 

We’ve all found ourselves staring at a seemingly intractable problem and wishing we had help — even a sympathetic ear. That’s when a user group comes in handy. Imagine other people who use the same system as you and face the same frustrations every day. I know where to find those people: the Network of Vertafore Users, or NetVU. Our motto is “strength in members,” and it’s true that what benefits one, benefits all.

You know that feeling of accomplishment you get when you solve a problem? Multiply that feeling by a thousand when you solve a problem for everyone. The squeaky wheel gets the grease, not just for herself, but for others. Our industry is brimming with potential in the form of eager, motivated professionals who have a lot in common and are often working toward the same goal. When we put our heads together, we can accomplish so much more than any one of us can do in isolation.

My firm uses a Vertafore product called AIM for presenting a bound quote to a client, and it’s also our primary accounting system. Hundreds of other firms use AIM for pretty much the same thing, so you can bet that at any given moment dozens of us are looking at similar screens, performing the same tasks. 

They say the devil is in the details, and I think that saying was invented for insurance. There are many variables embedded in a single policy, and, when you’re talking about commercial E&S policies, it can get even more complex. More variables mean more opportunities for errors and omissions, which of course are the bane of every professional. 

That’s why the AIM product work group is so vital to our success. It’s where users come together to advocate not only for their own needs, but for the good of all users. In fact, “advocate” is one of the three pillars of the NetVU strategic vision. The others are “educate” and “community.” Much of my day is spent advocating for our clients, my coworkers and firms just like ours. Collectively, we make a difference when we put our heads together and chart a course toward simpler workflows, fewer clicks and a better customer experience.

The purpose of the AIM product work group is to regularly review all of the suggestions submitted by users and prioritize them to achieve the greatest impact. Individual users make suggestions, and community members vote for the suggestions they believe are the most important or urgent. The product work group meets monthly to review all the suggestions and vote totals and discuss with Vertafore product managers which ideas are possible. We share screens and run simulations, discussing the “what ifs” and available options. By the end of the meeting, we agree on the fixes and enhancements that will be put into action. Sometimes, we learn that an idea has already been contemplated and will be in the next upgrade or release. That’s the power of collaboration, because, if each of us operates in our own vacuum, we put ourselves and our agencies at a disadvantage, because we are unaware of new features that will not only make our lives easier but make things better for our clients.

The agenda runs the gamut, from things like finding a more efficient way to adjust installment payments when an endorsement is added to a policy to ensuring that two people working on the same record aren’t overwriting each other.

An underlying principle of the product work group is to let people know that their voice is being heard. To that end, we regularly revisit the older submissions that may have become more relevant over time. Maybe it was a feature that a lot of people hadn’t started using at the time, and it didn’t get many votes. But now the feature is rapidly gaining adoption, and more agencies are encountering the same problem. Our committee has the authority to escalate those issues and recommend immediate action.  

See also: Pressure to Innovate Shifts Priorities

I know I speak for other members of the product work group when I say that we get a great deal of satisfaction from these meetings. We are all “fixers.” We realize that we’re volunteering our time, our minds and our energy to the cause because it helps all users. It’s an unselfish act, really. And that seems counterintuitive in a competitive industry, right? On the surface, yes, but at the end of the day we do this because we have the best interests of the industry at heart.  

My husband and I have vowed to start every serious discussion with, “Do you want a solution, or do you just need me to listen?” We’re finding that’s also a great approach to problem-solving for agency management systems.

Being a leader is difficult, and even more challenging in a crisis. Given the great challenges presented by COVID-19, it can feel like we’re caught in a never-ending crisis, or at least one crisis after another.

As leaders, we have a responsibility to those we lead, and, though we may initially find ourselves thrown off balance by a crisis, the mark of a true leader is the ability to recover quickly and implement effective decisions. 

In my years leading both in business and the military, I have found that three key factors can help during crises: preemptive planning, building team trust and strengthening resilience.

Whether you are in the middle of a crisis, or waiting for the next shoe to drop, consider these tactics to ensure you are better-equipped to stay calm under pressure.

Don’t be caught off guard; plan preemptively 

Crises typically catch people off guard because they are unanticipated events. As leaders, we must expect the unexpected. The best way to thrive during a crisis is to have a solid plan in advance.

Meet with your team on a periodic basis for regular brainstorming sessions. Take time to consider all eventualities, especially those that seem improbable.

One of my favorite military exercises for preemptive planning is called “wargaming." Members of different staff sections and backgrounds attack proposed plans, assess vulnerabilities, identify risks and expose shortfalls. The plan with the greatest probability of success wins.

Take the strongest plans from these assessments to create a comprehensive plan of action, including backup plans and branch plans, so you can have protocol for what you and your team will do when the next crisis occurs.

See also: Insurance Leaders Use Digital for…

Build team trust through effective communication

To lead effectively during high stress and uncertainty, leaders must be able to trust their teams, and the team must trust the leaders.  

Trust begins with communication. Not only must a leader be able to make decisions and explain to their team the big picture of what must be done, they must also be able to listen to their team in real time and assess what people need to most effectively do their jobs.

A crisis makes communication much more difficult than usual, so it’s important to develop clear effective communication in advance. 

Make sure you are taking time to hear your team and provide channels by which they can report small problems before they become big ones. Also, provide opportunities for them to share what they know so everyone can grow.

When people trust that they are heard, they will more effectively communicate under pressure.

Strengthening resilience even in chaos

The truth is, nobody performs efficiently in chaos. But, by developing resilience, you can more quickly and efficiently come back to your center when thrown off by a crisis.

To develop resilience, there are two important considerations. 

The first is identifying limiting mindsets. During a crisis it can be very tempting to turn toward negative thoughts like “Everything is broken,” “This will never end,” or “This is all my fault.” Not only are these thoughts not true, they can inhibit your ability to rebound.

The second consideration is proper perspective. As a leader, you are setting the tone for proper response during a crisis. It’s important for you to manage your stress, mindfully communicate and magnify positivity. 

By developing resilience, you will be able to come out of the fog of chaos sooner, are able to take in information as it comes and can identify when there are opportunities to innovate and adapt to the changes at hand.

See also: How to Pursue Innovation in a Crisis

Crisis management going forward

Even though crises are unexpected, we can still do our best to prepare for when they inevitably arrive.

Through preemptive planning, you will know the first actions to take next time a crisis comes. If you didn’t plan for that crisis, then you’ll add it to your plan and be better prepared next time.

By developing trust with your team, you will forge stronger bonds that can withstand the strain of a crisis and more efficiently communicate to resolve problems as they arise.

With resilience, you will be able to effectively rebound from the initial shock and ensure proper perspective through the continuing challenges.

Though they are undeniably challenging, crises create many opportunities, even if it is only the opportunity for us to shine as leaders and set an example for our teams by staying calm and effective when everything around us seems to be falling apart. This isn’t always easy, but with practice we can all get better and take care of our most important asset, our team.

How much do most organizations spend to handle the average return-to-work case?

One 2015 U.S Department of Labor study found that the average human resources department serving at least 1,000 employees spends more than $4,800 just in labor costs per return-to-work case. And with the same study calculating an average of 31 return-to-work cases per year (and accounting for inflation), it is pretty safe to say that many are spending far more than they realize. 

These figures also do not take into account the lost productivity from handling paper-based forms, the manual generation of reports and missed details and deadlines that could put an organization at risk.

Fortunately, there are more options today to help teams not only take control of the return-to-work process but also to use that data to make decisions and changes to keep employees safe and the organization focused on its mission. 

One of the most powerful is the choice to digitize workflows with a flexible, no-code business process platform. So what would that entail, and how could an organization get started on the path toward digitizing the return-to-work process? 

How Digitized Processes Foster Employee Privacy and Efficient Workflows

When an employee gets sick or injured at work, several stakeholders get involved immediately, and many key decisions need to be made. There are likely also regulatory requirements and medical recommendations with their own timelines, restrictions and requirements. Needless to say, handling each of these facets manually requires a lot of effort.

In a typical return-to-work case, there are likely five different parties involved:

1. The employee-manager, who wants to ensure they properly follow all procedures and help their employee
2. The physician, who wants to ensure the employee is getting the medical care they need
3. The insurance adjuster, who wants to keep the overall cost of injury down  
4. The workers’ compensation (WC) team, who is there to investigate any workers’ compensation claims
5. The employee, who wants to get well and return to work

Combined, these parties work together to initiate and manage the return to work process, which could resemble a workflow like this:

Each of these stakeholders needs access to the right information at the right time to either meet their obligations or to support the employee during their treatment plan. The information also needs to be secure, accessible across a range of platforms and logically organized and intuitive to handle.

A return-to-work process facilitated with a no-code digitization platform not only gives the professionals that understand and manage the cases the power to design and maintain their own workflow, but it also introduces several other key benefits:

• Increased visibility, communication and accountability from across the return-to-work process allow for case-specific and trend analysis involving internal and external stakeholders.
• Integration and consolidation across the many systems and workflows — digital and manual — involved in managing the return-to-work case into one secure, modern solution bolsters resilience and ease of maintenance.
• Automated routing, rule-based decision points and built-in notifications help to ensure that the right people have the right information and processes to continue moving forward.
• Personalized web-enabled dashboards and employee self-service forms make accessing information easier.
• Automated integration of stakeholder input into centralized case repositories removes the need for separate document handling.

See also: Access to Care, Return to Work in a Pandemic

The Benefits of Digitization to Your Bottom Line

While the primary focus is always on how to support an employee as they get their treatment, return-to-work cases can also have a noticeable impact on an organization’s productivity and operating costs.

Nimble and Responsive Processes

If your current return-to-work process involves sorting through emails, texts and documents, the decision to digitize can immediately make a big difference for everyone involved. 

Instead of what seems like endless document management, duplicative tasks and manual entry, a digitized return-to-work process can:

• Standardize the initial claim form to help ensure all the necessary data is collected the first time.
• Enable triggerable actions, notifications and reminders to prevent bottlenecks and keep task owners accountable.
• Digitize and secure key records so all information stays confidential and compliant while saving on storage costs.
• Enable accessibility anytime, anywhere — online or offline —so all parties get what they need.

In other words, digitizing the return-to-work process can be a win for all those involved. Employees don’t have to manage mountains of paperwork or wonder about the status of their case. Internal staff members are empowered to design the processes that work for their business and make it easier to meet compliance standards. And all stakeholders can trust that their data and work are being kept safe and secure.

The Impact of Outsourcing

With just a cursory look, the idea of outsourcing return-to-work management may seem like the best financial and operational decision. However, digging deeper into the workflow and costs, this option can be less attractive than choosing to use a no-code process digitization platform in-house.

For example, though cost estimates can vary, outsourcing a return-to-work process can equate to hundreds of dollars per case. While some cases are complex and come with unique accommodations and planning, others are straightforward and involve limited case management and no accommodation actions. 

In either case, having a digitized, rules-driven platform can automatically route each claim based on its nature. In turn, an organization can not only help to ensure that the right parties get involved and the necessary tasks start but also that costly, less-personalized third-party services are replaced with a platform simple enough for process owners to design and manage on their own.

Bringing It All Together

Though every organization never wants to have to process a return-to-work case, they need to be ready to not only help their employees get the medical care, treatment and support they need but also to identify the means to do it as effectively, efficiently and productively as their condition allows. 

This is where a digitized return-to-work process flow delivers: giving process owners the tools, data and built-in document management and communications features they need to do their job while enabling the visibility that employees and other stakeholders require to play their part. The result is a means to replace a disjointed and inefficient process with one that puts the employee first while also making compliance, deterrence and overall management easier.

People don’t necessarily think about a career in insurance from the time they are five years old. So, how do we reach today’s job seekers? Many of them are less interested in job title and more interested in mission. They want to be sure that the organization they join shares their values, beliefs and passions in areas like diversity, equity and inclusion (DEI), the environment, social responsibility and governance (ESG), work-life balance and overall wellness.

The dramatic shifts in the workplace environment we’ve seen throughout the COVID-19 pandemic have brought the insurance industry to an inflection point. Employers who recognize the importance of these issues will capture new talent and inspire their current workforce. Those who ignore it risk losing talent and more.

At the Insurance Industry Charitable Foundation’s (IICF) 2021 Inclusion in Insurance Forum, we brought together more than 600 industry professionals, executives, DEI leaders and wellness experts from the U.S. and Europe. We focused our discussion on how we can turn our best ideas on DEI, mental health and wellness and the future of work into reality. Then we distilled the key findings from these conversations into a recently released white paper, “Diversity, Equity and Inclusion in Insurance: Advancing Ideas into Action.”

Here’s a high-level summary of what we learned:

DEI: All voices must be heard

The pandemic-inspired work-from-home revolution opened our eyes to inequalities across workforces, from limited Wi-Fi access and inadequate home workspaces to childcare and home-schooling dilemmas. Add in the civil unrest following the murder of George Floyd, and the importance of DEI became a moral imperative worldwide.

See also: The Broad Reality of Diversity

Yet promoting and developing DEI isn’t just the right thing to do. It also creates a stronger insurance organization. Companies with diverse management teams experience a 19% increase in revenue compared with less diverse companies. In addition, companies with greater diversity are 70% more likely to capture new markets.

Because of this, insurance organizations must go beyond simply offering programs. They must make DEI a part of their cultural fabric. Harriet Dominique, chief diversity officer, USAA, said it well: “DEI initiatives must be run as a business strategy just like every other strategy an association undertakes. It needs to be interwoven into everything the association does to realize the maximum benefits.”

To help insurance companies create a more inclusive future, IICF recently formed the IICF IDEA Council, which includes leaders in DEI and human resources from more than 40 organizations. Council members are tasked with working together to share ideas and best practices to find ways to collectively advance ideas into action – for the betterment of the entire industry. The IICF IDEA Council truly captures the heart of IICF’s mission by encouraging insurance companies to come together and put aside competition, with the understanding that what is good for the industry is good for every company in the industry. We’re focused on creating a diverse talent pipeline of future insurance professionals, creating safe and innovative workplaces and building on the valuable partnerships already established with nonprofits through IICF’s philanthropic efforts. 

We’ve already seen one idea start to take flight. IICF has partnered with Indeed to create an IICF Talent Hub where non-traditional job seekers can learn more about insurance industry opportunities, find job search resources, access testimonials from industry employees and view opportunities that might be a fit for them. 

There will be information for companies, as well. The IICF Talent Hub will soon host a webinar with a panel from AIG, Aon and Zurich focusing on the value of apprenticeship programs within the industry and the opportunities they can deliver. For many from underserved communities, finding a promising job can not only change their lives but also improve the lives of their families and potentially improve entire communities. The IICF Talent Hub will also serve as a resource for insurance companies looking to attract new talent into their organizations. Participating employers can post jobs along with detailed information on their company’s culture, ESG commitment and philanthropic work. Our hope is that the IICF Talent Hub will help inspire change and build a more inclusive workforce in our industry. 

Wellness: Employees want help achieving work-life balance

Work-life balance is one of the top areas where employees seek employer support. This balance and support are factors affected by DEI and contribute to helping employees achieve optimal wellness. In fact, 92% of respondents to the 2021 Willis Towers Watson Trends in Healthcare Survey said DEI is important to them when looking at an employer’s overall health and wellness strategy.

The shift to hybrid work environments has opened the eyes of senior management to the fact that flexible scheduling options can energize their employees’ health and happiness in the workplace and at home. It’s up to each organization to decide how they can best support their employees and provide flexibility. A smart way to start is by listening, which we’ve found to be a key factor in creating a culture of inclusiveness and alliance. The more leaders educate themselves and listen before they act, the better allies they become with members of their workforce.

The future of work: Ask your employees for their ideas

None of us know exactly what the future of work will hold. That’s why leaders should look to their employees for insight. As Fran O’Brien, division president, NA PRS, Chubb, puts it, “People will come up with fantastic solutions if you give them the opportunity.”

Today’s employees want to come to work as themselves and be accepted and welcomed. They also crave a deeper connection with their employers. Employees want their companies to be involved in philanthropic pursuits that matter to them personally. And they want to know how their organization’s corporate social responsibility strategy will create a better tomorrow for everyone. 

The deeper companies engage their employees in conversations around these critical issues, the more likely their employees are to point them toward a brighter future.

See also: Designing a Digital Insurance Ecosystem

Carrying our mission forward

These important conversations about DEI, wellness and the future of work didn’t stop at the IICF’s annual forum. We’re continuing the conversation in 2022 at our regional forums in Chicago, Dallas, Los Angeles, New York and London. The forums will help different regions identify inclusion strategies that will work best for their local areas and will provide opportunities for industry members in each region to not only be inspired by these important discussions but to connect and network with colleagues who share their passions. 

In a world where people want to work with mission-driven companies, our industry has a distinct advantage. We are here to serve people in their time of greatest need. By taking bold steps to build a more inclusive workforce, we will carry forward our industry’s noble mission while also building greater business success through more diverse voices and representation.